Category: Uncategorized

NASHVILLE, Tenn. (June 7, 2016) – There were 3,698 closings reported for the month of May, according to figures provided by the Greater Nashville Association of REALTORS®. This represents an increase of 3.9 percent over the 3,558 closings reported for May 2015.

Year-to-date closings total 14,583. That is an 8.8 percent increase compared to the 13,402 closings reported through May 2015.

“May was another strong month for the housing market,” said GNAR President Denise Creswell. “The successes and challenges we face locally are in-line with the rest of the country.

“Our median price rose 10 percent in May compared to 2015. The most recent national numbers from April show median price is up 6.3 percent, so we’re similar in growth. Middle Tennessee is also following national trends with housing supply. Our inventory levels made slight gains in the condo and multi-family areas in May compared to the previous month, but are still down overall when compared year-to-year. Inventory levels nationally are also struggling, down 3.6 percent for April of this year compared to 2015.”

A comparison of sales by category for the month of May is:

There were 3,930 sales pending at the end of the month, compared to the 3,730 pending sales at this time last year. Single-family homes averaged 57days on the market in May.

The median residential price for a single-family home during May was $258,900 and for a condominium it was $194,000. This compares with last year’s median residential and condominium prices of $235,000 and $175,000, respectively.

Inventory at the end of May was 12,122, down from 13,764 in 2015. The current inventory of properties by category, compared to last year, is:

“Last month, Realtors from across the country met in Washington, D.C. for the National Association of Realtors Legislative Meetings. One of the biggest takeaways from those meetings was the proposed changes to the FHA condominium loan program,” said Creswell. “The changes announced by Housing and Urban Development Secretary Julian Castro address streamlining the recertification process, reducing the owner-occupancy requirements and the limits on the types of property insurance FHA considers acceptable coverage.

“Condos are often excellent and affordable properties for first-time buyers. As competition is so tough in the entry-level market, anything that can be done to make homeownership more attainable for eligible first-time buyers is a positive move in the industry,” said Creswell.

Homeowners investing in remodeling often wonder if they’ll ever see those funds again when it’s time to sell. Although the answer is best evaluated on a case-by-case basis, REMODELING magazine has published these figures—specific to Nashville—to inform middle Tennessee homeowners of what type of return they can expect on their remodels. The top three most valuable changes are adding attic insulation, updating the kitchen (countertops, appliances, fixtures, cabinets, backsplashes, lighting), and adding an exterior manufactured stone veneer.  Adding a backup generator or a bathroom were among the least lucrative investments to make, and should only be done for personal benefit as opposed to raising resale value.

If you’ve recently sold your home in Middle Tennessee, or are about to close on a sale, then chances are you’re realizing a healthy gain on your investment. With that in mind, it’s time to take account of the income tax implications.

The principal question, of course, is what will you owe on the net earnings from the sale? If you speak IRS, then your next stop should well be IRS Publication 523. But before you go there, take a look at this summary from Money magazine.

First of all, Money writes that your tax liability is contingent upon how long you lived in the home. For example, if you’re a single homeowner and spent at least two of the last five years in the home, then up to $250,000 in net gains on the sale are tax-free. If you’re a couple filing jointly, then your threshold for tax-free gains escalates to $500,000. However, for any gains that exceed your threshold, you’ll owe capital gains taxes.

Follow these steps from Money to determine your gains:

1. Subtract selling expenses (i.e. professional fees and other closing costs) from the sale price to arrive at a net sale price.
2. Calculate your basis: this is what you paid for your home, plus certain closing expenses such as title insurance and recording fees (but not loan points or lender fees), as well as the cost of permanent improvements (i.e., an addition, or a swimming pool).
3. Your gain is the difference between 1 and 2.

Money tells us to be aware of exceptions to the two-year rule.  If you’re disabled, relocating for work that’s more than 50 miles away, moving to seek medical treatment for yourself or a relative, or for certain “unforeseen circumstances,” then taxes on the gains can be pro-rated.  As in any major financial decision, play it safe, and check first with a local Middle Tennessee tax advisor.

 

Link to PDF: Twelve Twelve 1212 Laurel Street Condo Pricing Nashville

Once saddled with the reputation for being a “generation of renters,” millennials are increasingly gravitating toward home ownership.

A recent survey by Realtor.com found that 65 percent of people between the ages of 25 and 34 who were visiting the website were hoping to buy a house in the next three months. And that statistic was reinforced by a finding this past August by the National Association of Realtors: that first-time homebuyers – typically young adults – purchased 32 percent of existing homes that month, up from 28 percent in July and the highest rate since 2012.

“People who believe that millennials are disinterested in home ownership are grossly mistaken,” said Jonathan Smoke, chief economist at Realtor.com.

Considering that millennials – broadly defined as ages 20 to 34 – represent about 27 percent of adult residents in Nashville and 17 percent in Williamson County, that trend is likely to make an impact on Middle Tennessee’s real estate market for years to come.

Among the factors motivating millennials to start buying include rising rents in many major U.S. markets, the prospect of higher interest rates in the near future, and the needs of family – finding space for children. Additionally, as some millennials begin to earn more income and shed debt from student loans, more are financially set to invest in real estate.

If you, or someone you know, are ready to buy your first home, call me to learn more about the home buying process.

“Thank you, Kevin Martelli, for everything you’ve done these last few months.  I am not sure I would’ve survived all of this without you.  You are truly a tremendous person with a kind heart and having so much patience with me.  You’re truly one of a kind!!  And if anyone ever needs a Realtor in the Tennessee area, Kevin is your man.”  — Erica G.  3/4/2016

Teamwork is as American as the American Dream. And it makes sense that first-time homebuyers would build a team to help pursue their dream. Here are the players that you should recruit:

1. A full-time Realtor®. When you have a Nashville Realtor who is committed and engaged in the market, you can identify your future home early in the listing process. Today’s market is moving fast and you need someone who is full-time, focused and “on it!”

2. A good lender. A down payment is often the biggest stumbling block, so find a lender who is local to Middle Tennessee and experienced working with first-time buyers. Preferred loan officers have the ability to build “what-if” scenarios on their computer so you can better assess your options.

3. Family. Do you have parents or grand- parents with money sitting in a savings account at 0.1 percent interest? They would be far better off investing in you. If they can help with your financing, they could get a two percent return or whatever rate you agree upon.

4. Inspector. Home inspectors can root out potential issues with properties before they become issues for you. Pareto partners have strategies to get inspections done.

5. Transaction coordinator. Identify a Realtor® who serves as transaction coordinator to shepherd you though each step of the purchase process.

When you are looking to buy a home, make sure you evaluate more than just the Realtor, who is only one piece of the home buying puzzle. Hire someone that works with a great team!

Trends in housing prices are rightfully a significant issue in Middle Tennessee. But much of the media attention on price loses sight of the true cost of housing, and just how affordable housing is in Tennessee.

For purposes of analysis, consider the cost of housing as a three-legged stool. And when all three legs are firm, the stool supports an affordable housing market.

The first and most obvious leg is the purchase price.

The second leg is housing payments, which is heavily influenced by mortgage interest rates. With rates hovering near historic lows for much of this decade, monthly loan payments have remained low, which has increased the buying power of all Americans. And Tennessee ranks as the 12th lowest state for average real estate tax rates. At an average cost of $1,287, property taxes in Tennessee are just 62% of the national average ($2,089).

The third leg is household income. Local and state median family income is in line with the national median of $53,046. In Nashville, median household income is $46,758. Franklin’s median income is even higher at $81,432. Tennessee’s median income is $44,621.

This map shows the states with the highest and lowest property taxes, based on taxes as a percentage of home value in that state:

As 2016 unfolds, this may be the most unexpected gift for Nashville homebuyers. Economists have been nearly unanimous in predicting a jump in interest rates this year, up to as much as 5.5 percent. But due in part to concerns over global economic conditions, rates have actually DECLINED over the  first 3 months of the year! And if this trend continues, we may even see rates plunge to levels not seen since early 2013.

Not only does this boost purchase power for would-be buyers in Middle Tennessee, it creates a window of opportunity to refinance and pull equity out of your property. In 2013, the low rates occurred at a time when home values were still suppressed in the wake of the recession. Since then, housing in Middle Tennessee has experienced significant appreciation, so more homeowners may be able to take advantage of this opportunity.  And for those who purchased with less than 20 percent down, you may have the added bonus of removing your mortgage insurance.  (Woohoo, no more PMI payments!)

FOR SELLERS – Even though there is greater competition in today’s market, buyers are still looking for clean, updated, properly priced homes in move-in condition. Anything less could cause you to leave money on the table. Be ready for a fast move in the lower price ranges. 2016 so far has presented a good time to sell.

FOR BUYERS – Be knowledgeable about the Middle Tennessee market and its different housing options. Get the right people on your team, know what you want, be ready to act quickly, do your homework, and make a realistic offer.

FOR INVESTORS – Understand how investing in real estate can increase your wealth. Work with a Realtor who can guide you through the process and who will provide you with market analysis to identify fair pricing and trends. Be patient, prepared, and decisive.

FOR BUILDERS – The landscape is competitive and could be tricky. With building occurring in the $450,000-$600,000 range, there is opportunity for the move-up buyer. Builders can find more ready buyers by working closely with the Realtor community.